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April 29, 2013

Do CIMAs Get More Bang for Their Buck Than CFPs?

IMCA challenges CFP Board claim of ‘one profession, one designation’

IMCA CEO Sean Walters at an IMCA conference.

The Investment Management Consultants Association released research on Monday at its annual conference in Seattle that it says shows advisors with certified investment management analyst certification earn more, see stronger asset growth and express greater career satisfaction than those without the designation.

Additionally, one-third of CIMA professionals report earning more than $380,000 a year, compared with just 6% of other financial advisors.

“It challenges the notion of ‘one designation for one profession,’” said IMCA CEO and executive director Sean Walters. “It also shows that, increasingly, wealth management teams are adding CIMA-certified members. Aite Group, which conducted the research, looked at teams with CIMA versus those with only CFPs. The former scored very well.”

In particular, the CIMA certification “teaches advisors how to evaluate investment managers, which aids in attracting high-net-worth clients because they have a better understanding of alternative investments and other tools suited to them.”

Walters added that the CFP is for planning, the CFA is for investment management and the CIMA “must be on their radar, especially if they charge a fee and deal with sophisticated strategies and clients.”

Regarding compensation, the survey found that one-third of CIMA professionals earn more than $380,000—and 62% earn more than $215,000—compared with just 6% and 18%, respectively, for other advisors. This earning differential is unchanged when non-CIMA advisors have other prominent industry certifications or by years of industry experience, according to Aite.

In addition to higher compensation and greater career satisfaction, other key findings show that CIMA professionals:

Advise more profitable clients. Both solo and team practices with CIMA professionals manage twice the assets per client and generate twice the revenue per client compared with other practices.

Capture additional assets. Seventy percent of practices with a CIMA professional attract 75% or more of their clients’ investment assets.

Advise more affluent clients. Fifty-two percent of practices with more than one CIMA professional advise high-net-worth ($1 million to $9.99 million) and ultrahigh-net-worth ($10 million or more) clients.

Are part of an experienced group. Eighty-four percent of CIMA professionals have 10 or more years of experience as financial advisors.

Possess important institutional expertise. Having more than one CIMA professional in a practice tends to open up the business to institutional clients (foundations, endowments, and 401(k) plans); multi-CIMA certificant practices focus about 13% of their business on institutional clients

Have ownership in their practice. Eighty-four percent of CIMA professionals are practice owners or team leaders compared with 57% of other financial advisors.

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